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Bai ( Buying & Selling) Presented by : Zubair Mughal

Bai ( Buying & Selling) Presented by : Zubair Mughal CEO – AlHuda: Centre of Islamic Banking & Economics. Basic Rules of Bai. Existence of Product/Commodity Ownership of Product/Commodity Possession of Product/Commodity. Basic Rules of Bai. Unconditional basis

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Bai ( Buying & Selling) Presented by : Zubair Mughal

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  1. Bai ( Buying & Selling) Presented by : Zubair Mughal CEO – AlHuda: Centre of Islamic Banking & Economics

  2. Basic Rules of Bai • Existence of Product/Commodity • Ownership of Product/Commodity • Possession of Product/Commodity

  3. Basic Rules of Bai • Unconditional basis • Product have value/Price. • Bai on Such product which is permissible in Islam.

  4. Basic Rules of Bai • Product Must be Identify, clear with all demanding Qualities. • Not based on any incident, struggle etc • Price must be clearly identified.

  5. Bai (Buying & Selling) Basic Kinds of Bai

  6. Kinds of Bai • Bai Musawamah • Bai Murabaha • Bai Surf • Bai Salam • Bai Istisna’ • Bai Urboon

  7. Basic Kinds of Bai • Bai Eenna • Bai Touliya • Bai Wadhia

  8. Bai There are three basic type of Bai’s which are using in Islamic Banking as the mode of financing in Pakistan • Murabahah • Salam • Istisna’

  9. Murabahah • Basically, it’s not a mode of financing but a source to avoid interest Dealing • It’s not a type of loan, but a deal (Bai) • Murabahah can be used as source of financing when client needs funds to purchase any product/Machinery etc.

  10. Murabahah • Sharing of Risk of loss differentiate Murabahah from the interest category • Product Must be bought from third party for avoid buy back transaction • Roll over is not Valid in Murabahah • If actual cost can not be identified then Murabahah deal not possible.

  11. Bai Important Note Following 3 Basic Rules of Bai are exceptional for Salam & Istisna’ • Existence of Product/Commodity • Ownership of Product/Commodity • Possession of Product/Commodity

  12. Salam • Pay 100% amount in Advance. • Product must be quantified, identified and Measured with quality. • Date of delivery, Time, Place must be mentioned clearly in advance. • Salam is not valid for a specific farm/land/garden.

  13. Istisna’ • Not necessary to pay the 100% amount in advance Like Bai salam. • Price must be decided on beginning of the contract. • Qualities, features of that product must be clearly identified.

  14. Bai Differences Between Istisna and Salam

  15. Differences Between Istisna and Salam • Istisna deal with manufacturing items, but Salam could or could not be manufacutred, but salam ideal of agriculture sector. • In salam advance payment is necessary, but in Istisna’ its not.

  16. Differences Between Istisna and Salam • Date, time of delivery the necessary part of Bai Salam, But in Istisna, it is not the part of the deal. • In Bai salam, it can be cancelled one sided, but in Istisna, it could be cancelled, if production is not started yet.

  17. Type of Bai according to Quality • Bai Salah • Bai Fasid • Bai Batil • Bai Maqoof

  18. Type of Bai according to Quality • Bai Majool • Bai Muqayaddah • Bai Mu’ajal

  19. Thank you

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